Uber scrambles to head off Brazil bill regulating ride software

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BRASILIA (Reuters) - Hundreds of drivers for the internet based ride-hailing firm Uber drove through Brazil’s largest cities on Monday to protest legislation that would turn them into regular taxi drivers subject to the same local licensing and taxation rules.

Uber drivers protest against a legislation threatening the company's business model that is to be voted in Brazil's national congress, in Sao Paulo, Brazil October 30, 2017. REUTERS/Paulo Whitaker

The chief executive of Uber Technologies Inc, Dara Khosrowshahi, arrived in Brazil to lobby against the bill that is due to be voted on by the Senate on Tuesday and which threatens the company’s business in a fast-growing foreign market.

Brazil is Uber’s third-largest market, with 17 million users, and the city of Sao Paulo sees more trips on the ride-hailing service than any other city in the world, ahead of New York and Mexico City, according to the company.

A spokesman for the company said the application as it exists could not operate under the new rules, including the use of a taxi license plate on cars owned by Uber drivers.

“The business model we have today would not longer be viable,” Uber’s executive spokesman in Brazil Fabio Sabba told Reuters.

Uber is already battling to keep operating in London after the city’s transport regulator deemed it unfit to run a taxi service and refused to renew its license.

Police said 800 Uber drivers drove through the center of Brazil’s capital Brasilia to protest the bill that many say will put them out of business. Similar protests in Sao Paulo and Rio de Janeiro snarled downtown traffic.

Uber did not organize the drivers’ protests but alerted authorities that they would happen.

“The bill will create so much bureaucracy that it prevents the 500,000 drivers in Brazil from earning income for their families,” Uber said in a statement.

Uber said it has paid 495 million reais ($150 million) in federal and municipal taxes so far this year.

The bill, which has already been approved by the lower house of Congress, would define ride hailing applications as public transport instead of private services and require drivers to get a special permit from city authorities. It would also establish additional regulations and taxes.

If the Senate votes to approve the bill, it will be up to President Michel Temer to sign or veto the legislation or parts of it.